Misremembering Thatcherism

Margaret Thatcher is continuing to divide opinion in death as she did in life.  Over on the right, commentators are giving her credit for "making Britons proud again" and for restructuring the British economy.  A generation on, both of these seem like pretty hollow achievements.  The Britain I left half a year ago was  almost as fractious, fearful and devoid of hope as I remember it being in the mid-1970s, when I emigrated for the first time. (It's a long story).

Meanwhile,  a lot of commentators from the left of the political spectrum are casting Mrs Thatcher as the Godmother of fiscal austerity.  Here is a typical example, from the reliably misinformed Tom Walkom at the Toronto Star. This is not a new interpretation of Thatcherism, but as Chris Dillow pointed out a few years ago, it's simply untrue.  The lady stood for a lot of things that the left doesn't much like -- privatisation, union busting, militarism, jingoism -- but cutting public spending simply wasn't one of them.

In fact, right wingers always seem to talk the talk on fiscal austerity a whole lot better than they walk the walk.  Right now in the UK, George Osborne has achieved the notable feat of curbing spending hardly at all, while convincing all and sundry that he's pared it to the bone.  One can only imagine how ugly things may get now that real cuts in important programs have actually begun, which happened at the start of this month. And of course, in the United States, Bush 43 inherited a fiscal surplus from Bill Clinton and promptly turned it into a monster deficit.  It's the Bush-era tax cuts, rather than anything Barack Obama has done, that are the real cause of the fiscal pressure the US is facing at the moment.

Generally speaking, left-of-centre politicians seem to do a better job of delivering fiscal austerity than right wingers do.  An early example of this in the UK, back in the 1970s, was old eyebrows himself, Denis Healey, who was regularly portrayed as "the best Tory Chancellor Britain ever had".  Healey was, of course, a life-long Labourite.  More recently,  Gordon Brown spent several years as a fiscally responsible Chancellor, until he started to believe his own quotes about "putting an end to boom and bust".

What's behind this pattern?  Back in the 1980s in Canada, the Tory governments under Brian Mulroney announced austerity budgets year after year, to howls of complaint from the Liberal opposition,  only to see deficits and debt rise inexorably.  Then, in the 1990s, the Liberals under PM Jean Chretien and Finance Minister Paul Martin got the public finances under control in short order.  When asked how the Liberals had managed to do this when the Tories had failed so abjectly, Martin said something to the effect that "the secret is that we don't have the Liberals in opposition".

That was only part of the story.  What really worked for Martin and Chretien was a combination of a strong US economy and a weak Canadian dollar.  Still, it's undoubtedly true that when the chips are down, left of centre governments are better able to sell fiscal austerity to their electorates than the heartless beggars over on the right, partly because right wingers can't credibly oppose them on the issue.  That's as true today as it was when Margaret Thatcher was in power.

FOOTNOTE: There's a very good analysis of Mrs Thatcher's economic policies here.